Equity Analysis /
Thailand

Thailand (Bualuang): System Integrator - Laying the groundwork

  • 1Q22 earnings look set to rise YoY but fall QoQ

  • Strong growth expected for full-year 2022

  • Business and profit expansion ahead

Napon Jaisan
Napon Jaisan

Equity Research Analyst

Bualuang Securities
3 May 2022

Since we initiated covering system integrator (SI) space, the price of ITEL has risen 3% (we had a BUY rating). In contrast, the prices of our two TRADING BUY calls, AIT and MFEC, have both slipped 6%. We still believe in the SI theme and expect a recovery in 2H22.  Our favorite for 1Q22 is ITEL, as we expect its expansion into big data and security to add to earnings for the quarter.

1Q22 earnings look set to rise YoY but fall QoQ

Our model indicates ITEL’s 1Q22 net profit at Bt56m, up 21% YoY but down 41% QoQ. The expected YoY growth is supported by a combin-ation of recurring income from data services and security projects (three ongoing anti-drone projects). The expected QoQ dive is due to the completion of one-off anti-drone projects in 4Q21. Our AIT net profit estimate is Bt144m, up 18% YoY but down 39% QoQ. (AIT’s auditor approved two big revaluations in 4Q21 that boosted NPAT). The expected YoY growth was led by the start of a Train Tracking & Freight Management System for State Railways of Thailand and heavier income from the Wan Link project for the SSO (which started in 4Q21).